Spain wind power growth slows on subsidy doubts: AEE

A view of electric wind power plants in Maranchon, near Guadalajara, Spain in this May 18, 2006 file photo.

MADRID (Reuters) - Spain's capacity to produce wind power grew at the slowest rate last year since 2003 due to uncertainty over future subsidies, industry group AEE said on Thursday in the world's fourth-biggest producer.

AEE estimated that Spain closed 2010 with wind parks capable of producing 20,664 MW in total, or 7.9 percent more than a year earlier. Wind power accounted for 16.6 percent of all electricity produced in Spain last year.

Less than 3,000 megawatts of wind power capacity were due to be installed in 2011 and 2012, AEE added.

"After that, payment to installations is unknown, nor the system to be used which, looking forward, hampers beginning work on new wind parks," AEE said.

"This is important, because Spain, like all European Union countries, will have to meet a target of 20 percent of final energy consumption derived from renewables, for which wind power will be basic."

Spain's government estimates that meeting EU 2020 targets will require increasing the country's wind power capacity to 35,000 MW, in addition to 3,000 MW off shore.

Wind power in Spain also moves the spot wholesale electricity market, because producers can sell it at a discount to power produced from imported gas and coal.

Subsidies have made Spain a leading producer of renewable energy but have added billions of euros to the debt pile of a government fighting to persuade financial markets its public finances are in order.

In July last year, the government reached a preliminary agreement with wind and solar producers, in which premiums paid to wind power producers above market prices would be cut by 35 percent in 2013.

Since then, however, the government has failed to reach cross-party agreement on an "energy pact" to determine the future of subsidies and Spain's generation mix.

Spain's biggest power utility, Iberdrola, had most wind parks installed at the end of 2010, AEE added, at 5,168.5 MW in 2010, followed by Acciona, on 4,037 MW.

Gamesa has manufactured most wind generators installed in Spain to date, on 9,846 MW, with Denmarks' Vestas in second place, with 3,529 MW.

(Reporting by Martin Roberts)